DeNA : Consolidated Financial Results for the Three Months Ended June 30, 2020

The following information was originally prepared and published by the Company in Japanese as it contains timely disclosure materials to be submitted to the Tokyo Stock Exchange. This English translation is for your convenience only. To the extent there is any discrepancy between this English translation and the original Japanese version, please refer to the Japanese version.

Consolidated Financial Results

for the Three Months Ended June 30, 2020

[IFRS]

August 5, 2020

Company name: DeNA Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange

Code number: 2432

URL: https://dena.com/intl/

Representative: Isao Moriyasu, President & CEO

Contact: Jun Oi, Managing Executive Officer (CFO), Head of the Corporate Unit

Phone: [phone]

Scheduled date of filing quarterly securities report: August 6, 2020

Scheduled date of commencing dividend payments: ―

Availability of supplementary briefing material on quarterly financial results: Yes

Schedule of quarterly financial results briefing session: Yes (for institutional investors, analysts and the press)

(Amounts are rounded to the nearest million yen.)

1. Consolidated Financial Results for the Three Months Ended June 30, 2020 (from April 1, 2020 to June 30, 2020)

(1) Consolidated Operating Results			(% changes from the previous corresponding period)
	Revenue	Operating profit	Profit before tax	Profit for the period
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Three months ended	30,041	(4.3)	12,570	442.1	14,462	274.4	9,867	285.4
June 30, 2020
Three months ended	31,383	(7.5)	2,319	(54.6)	3,863	(48.4)	2,560	(53.5)
June 30, 2019
	Profit for the period	Total comprehensive	Basic earnings	Diluted earnings
	attributable to
	income for the period	per share	per share
	owners of the parent
	Millions of yen	%	Millions of yen	%		Yen		Yen
Three months ended	9,902	304.7	18,317	51.8		79.86		79.75
June 30, 2020
Three months ended	2,447	(53.2)	12,067	―		16.83		16.81
June 30, 2019
(2) Consolidated Financial Position
					Total equity	Ratio of equity
	Total assets	Total equity	attributable to	attributable to
					owners of the parent	owners of the parent
	Millions of yen	Millions of yen	Millions of yen		%
As of June 30, 2020		285,582		198,151		194,353		68.1
As of March 31,		255,740		187,319		180,486		70.6
2020

2. Dividends

						Dividends per share
		End of 1st		End of 2nd		End of 3rd		End of		Total
		quarter		quarter		quarter		year
		Yen		Yen		Yen		Yen		Yen
Fiscal year ended		―	0.00			―		20.00	20.00
March 31, 2020
Fiscal year ending		―
March 31, 2021
Fiscal year ending
March 31, 2021				―		―		―		―
(Forecast)

(Notes) 1. Revisions to recently announced dividend forecast: No

2. The dividend forecast for the fiscal year ending March 31, 2021 has not been determined at this time.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2021 (from April 1, 2020 to March 31, 2021)

The consolidated financial results forecast for the fiscal year ending March 31, 2021 cannot be provided due to the difficulty of reasonably & accurately estimating the figures.

* Notes

1. Changes in Significant Subsidiaries during the Period under Review (changes in specified subsidiaries accompanying changes in scope of consolidation): No
2. Changes in Accounting Policies and Changes in Accounting Estimates
3. 1. Changes in accounting policies required by IFRS: No
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
4. Number of Shares Issued (common stock)
5. 1. Total number of shares issued at the end of the period (including treasury stock):

As of June 30, 2020	130,210,945 shares
As of March 31, 2020	150,810,033 shares

2) Total number of shares of treasury stock at the end of the period:

	As of June 30, 2020		6,718,442 shares
	As of March 31, 2020		25,310,018 shares
3) Average number of shares during the period:
	Three months ended June 30, 2020		123,993,459 shares
	Three months ended June 30, 2019		145,377,635 shares

(Note) The 207,895 shares of the Company's stock owned by the Stock Grant ESOP Trust account are included in the "Total number of shares of treasury stock at the end of the period" as of June 30, 2020, and the 211,583 shares of the Company's stock owned by the same trust account are included in the "Total number of shares of treasury stock at the end of the period" as of March 31, 2020.

• This report of quarterly consolidated financial results is outside the scope of quarterly review by a certified public accountant or accounting auditor.

• Explanation of the Proper Use of Financial Results Forecast and Other Notes
  (1) Consolidated Financial Results Forecast
  The forward-looking statements herein are based on information available to the Company and certain assumptions deemed reasonable as of the date of publication of this document. They are not intended as the Company's commitment to achieve such forecasts, and actual results may differ significantly from these forecasts due to a wide range of factors.

(2) Dividend Forecast

The Company plans to set the cash dividend forecast for the fiscal year ending March 31, 2021 considering the overall progress in performance and other factors, and promptly announce said expected dividend amount.

(3) Method of Obtaining Supplementary Briefing Material on Financial Results

The Company is planning to hold a briefing session for institutional investors, analysts and the press on August 5, 2020. The briefing materials to be distributed at the session are scheduled to be posted on the Company's website at the appropriate time for disclosure. In addition, videos and primary Q&A of the briefing session are scheduled to be posted on the Company's website at a later date shortly thereafter.

Appendix
1. Overview of Operating Results and Financial Position	2
(1)	Overview of Operating Results	2
(2)	Overview of Financial Position and Cash Flows	3
(3)	Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information	4
2. Condensed Consolidated Financial Statements and Principal Notes	5
(1)	Condensed Consolidated Statement of Financial Position	5
(2)	Condensed Consolidated Income Statement	7
(3)	Condensed Consolidated Statement of Comprehensive Income	8
(4)	Condensed Consolidated Statement of Changes in Equity	9
(5)	Condensed Consolidated Statement of Cash Flows	10
(6)	Notes on Going Concern Assumption	11
(7)	Notes to Condensed Consolidated Financial Statements	11
	1.	Additional information	11
	2.	Segment information	11
	3.	Earnings per share	14
	4.	Impairment of assets	14
	5.	Significant subsequent events	15

- 1 -

1. Overview of Operating Results and Financial Position

(1) Overview of Operating Results

During the three months ended June 30, 2020 (from April 1, 2020 to June 30, 2020), the Group made efforts to enhance corporate value over the mid to long term by ensuring healthy profitability and creating new hit titles in its Game Business, while making optimal growth investments in new business areas to realize a stronger business portfolio.

During the three months ended June 30, 2020, revenue increased year-on-year in the Game Business and the Live Streaming Business, while revenue decreased year-on-year in the Sports Business due to the impact of the spread of the novel coronavirus disease (COVID-19).

Cost of sales and selling, general and administrative expenses in total decreased year-on-year. Expenses including commission fees in cost of sales increased in line with the performance of the Game Business and the Live Streaming Business, while depreciation decreased in line with the decrease in intangible assets year-on-year. Expenses related to the Sports Business and the former Automotive Business also decreased year-on-year.

In other income, due to an absorption-type company split of businesses related to taxi dispatch apps, etc. effective April 1, 2020, the Company recorded a gain on transfer in the amount of ¥2,045 million, which is calculated as the difference between the compensation for this company split and the net assets based on the book value of the assets and liabilities of the transferred business immediately prior to the company split. In addition, following the transfer of a portion of the Company's shares in SHOWROOM Inc. during the three months ended June 30, 2020, the Company recorded a gain on sales of shares of subsidiaries of ¥7,889 million.

As a result, revenue of the DeNA Group was ¥30,041 million, down 4.3% year-on-year, operating profit was ¥12,570 million, up 442.1% year-on-year, profit before tax was ¥14,462 million, up 274.4% year-on-year, and profit for the period attributable to owners of the parent was ¥9,902 million, up 304.7% year-on-year.

Business performance by segment is as follows.

During the three months ended June 30, 2020, changes have been made to the segment classification, and comparison and analysis of business performance by segment has been done after restatement to the revised segment classification. For details, please refer to "2. Condensed Consolidated Financial Statements and Principal Notes (7) Notes to Condensed Consolidated Financial Statements 2. Segment information 1) Outline of reportable segments."

1. Game Business
   Revenue of the Game Business was ¥21,231 million, up 7.8% year-on-year, and segment profit was ¥4,608 million, up 35.4% year-on-year.
   During the three months ended June 30, 2020, both revenue and profit increased year-on-year due to steady performance of existing titles, contributions from titles that were launched in Japan and overseas in and after the previous fiscal year, and an increase in virtual currency consumption year-on-year.
2. Sports Business

Revenue of the Sports Business was ¥1,211 million, down 84.8% year-on-year, and segment loss was ¥2,082 million, compared with segment profit of ¥2,657 million for the same period of the previous fiscal year.

Due to the spread of COVID-19, the start of the official professional baseball games, which was late March in normal years, was delayed until June 19. During the three months ended June 30, 2020, there was impact from all games being held without spectators.

3) Live Streaming Business

Revenue of the Live Streaming Business was ¥5,742 million, up 227.8% year-on-year, and segment profit was ¥766 million, compared with segment loss of ¥312 million for the same period of the previous fiscal year.

This business includes services such as Pococha and SHOWROOM, and the Company has been proactively investing for growth of this business since the period before the previous fiscal year.

- 2 -

4) Healthcare Business

Revenue of the Healthcare Businesses was ¥446 million, up 7.5% year-on-year, and segment loss was ¥373 million, compared with segment loss of ¥454 million for the same period of the previous fiscal year.

Use of "MYCODE," "kencom," "Aruite Otoku," and other existing services provided in the healthcare service field was solid. Meanwhile, the Company made prior investments, mainly in the research and development field.

1. 1. New Businesses and Others
      Revenue of the New Businesses and Others was ¥1,579 million, down 1.9% year-on-year, and segment loss was ¥152 million, compared with segment loss of ¥1,519 million for same period of the previous fiscal year.
      This section comprises various initiatives that aim to reinforce the Group's business portfolio over the mid to long term as well as services of the E-commerce Business. The figures for the previous fiscal year include aggressive investments in the former Automotive Business.
2. Overview of Financial Position and Cash Flows
3. 1. Financial Position
      Total assets at the end of the three months ended June 30, 2020 were ¥285,582 million, an increase of ¥29,842 million compared to the end of the previous fiscal year.
      Current assets were ¥112,707 million, an increase of ¥4,615 million compared to the end of the previous fiscal year. This was due mainly to an increase in cash and cash equivalents by ¥9,497 million.
      Non-current assets were ¥172,874 million, representing an increase of ¥25,227 million compared to the end of the previous fiscal year. This was due mainly to an increase in investments accounted for using the equity method by ¥13,703 million.
      Total liabilities at the end of the three months ended June 30, 2020 amounted to ¥87,431 million, an increase of ¥19,010 million compared to the end of the previous fiscal year.
      Current liabilities were ¥34,272 million, representing a decrease of ¥6,509 million compared to the end of the previous fiscal year. This was due mainly to a decrease in trade and other current payables by ¥8,187 million.
      Non-current liabilities stood at ¥53,158 million, representing an increase of ¥25,519 million compared to the end of the previous fiscal year. This was due mainly to an increase of ¥20,000 million in borrowings.
      Total equity at the end of the three months ended June 30, 2020 was ¥198,151 million, representing an increase of ¥10,832 million compared to the end of the previous fiscal year. This was primarily attributable to a decrease of ¥33,183 million in treasury stock.
      In terms of liquidity, the liquidity ratio and ratio of equity attributable to owners of the parent were 328.9% and 68.1%, respectively, at the end of the three months ended June 30, 2020.
   2. Cash Flows
      Cash and cash equivalents (collectively, "cash") at the end of the three months ended June 30, 2020 increased by ¥9,497 million to ¥83,033 million compared to the end of the previous fiscal year. Cash flows in each area of activity and their respective contributing factors are as follows.
      (Operating activities)
      Net cash provided by operating activities for the three months ended June 30, 2020 was ¥6,349 million, compared to a cash inflow of ¥7,411 million in the same period of the previous fiscal year. The principal cash inflow factor was ¥14,462 million in profit before tax.
      (Investing activities)
      Net cash used in investing activities for the three months ended June 30, 2020 was ¥3,695 million, compared to a cash outflow of ¥3,962 million in the same period of the previous fiscal year. The principal cash outflow factor was ¥3,275 million in acquisition of property and equipment.
      (Financing activities)
   3. • 3 -

Net cash provided by financing activities for the three months ended June 30, 2020 was ¥11,259 million, compared to a cash outflow of ¥1,657 million in the same period of the previous fiscal year. The principal cash inflow factor was ¥20,000 million in proceeds from borrowings.

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information

The consolidated financial results forecast for the fiscal year ending March 31, 2021 cannot be provided due to the difficulty of reasonably & accurately estimating the figures. For information on the principal matters expected to have an impact on business performance for the fiscal year ending March 31, 2021 and the impact of the spread of COVID-19, please refer to "Consolidated Financial Results for the Fiscal Year Ended March 31, 2020 [IFRS]" announced on May 14, 2020.

As a result of a capital increase through a third-party allotment conducted in July 2020 by Mobility Technologies Co., Ltd., an associate of the Company accounted for using the equity method, the Company expects to record approximately ¥3.8 billion in share of profit of associates accounted for using the equity method during the six months ending September 30, 2020. Please also refer to "2. Condensed Consolidated Financial Statements and Principal Notes (7) Notes to Condensed Consolidated Financial Statements 5. Significant subsequent events."

- 4 -

2. Condensed Consolidated Financial Statements and Principal Notes

(1) Condensed Consolidated Statement of Financial Position

			(Millions of yen)
		As of	As of
		March 31, 2020	June 30, 2020
Assets
Current assets
Cash and cash equivalents	73,536	83,033
Trade and other current receivables	25,243	22,981
Income tax receivable	686	803
Other financial assets	2,296	1,017
Other current assets	6,331	4,873
Total current assets	108,093	112,707
Non-current assets
Property and equipment	3,082	2,893
Right-of-use assets	21,378	20,827
Goodwill	5,883	5,883
Intangible assets	7,243	6,813
Investments accounted for using the	22,378	36,081
equity method
Other non-current financial assets	86,832	99,557
Deferred tax assets	550	563
Other non-current assets	301	258
Total non-current assets	147,647	172,874
Total assets	255,740	285,582

- 5 -

			(Millions of yen)
		As of	As of
		March 31, 2020	June 30, 2020
Liabilities and equity
Liabilities
Current liabilities
Trade and other current payables	25,348	17,161
Borrowings	3,000	-
Lease liabilities	2,708	2,881
Income tax payables	398	930
Other current financial liabilities	563	982
Other current liabilities	8,764	12,319
Total current liabilities	40,781	34,272
Non-current liabilities
Borrowings	-	20,000
Lease liabilities	7,129	6,417
Provisions	980	930
Other non-current financial liabilities	954	297
Deferred tax liabilities	18,384	25,311
Other non-current liabilities	194	202
Total non-current liabilities	27,640	53,158
Total liabilities	68,421	87,431
Equity
Common stock	10,397	10,397
Capital surplus	15,237	15,817
Retained earnings	163,564	135,527
Treasury stock	(45,139)	(11,956)
Other components of equity	36,428	44,567
Total equity attributable to owners of
180,486	194,353
the parent
Non-controlling interests	6,833	3,797
Total equity	187,319	198,151
Total liabilities and equity	255,740	285,582

- 6 -

(2) Condensed Consolidated Income Statement

			(Millions of yen)
		Three months ended	Three months ended
		June 30, 2019	June 30, 2020
Revenue	31,383	30,041
Cost of sales	(13,640)	(13,699)
Gross profit	17,743	16,342
Selling, general and administrative expenses	(14,303)	(13,765)
Other income	134	10,087
Other expenses	(1,254)	(93)
Operating profit	2,319	12,570
Finance income	1,177	2,669
Finance costs	(649)	(70)
Share of profit (loss) of associates accounted for using	1,016	(708)
the equity method
Profit before tax	3,863	14,462
Income tax expense	(1,303)	(4,595)
Profit for the period	2,560	9,867
Attributable to:
Owners of the parent	2,447	9,902
Non-controlling interests	113	(35)
Profit (loss) for the period	2,560	9,867
			(Yen)
Earnings per share attributable to owners of the parent:
Basic earnings per share	16.83	79.86
Diluted earnings per share	16.81	79.75

- 7 -

(3) Condensed Consolidated Statement of Comprehensive Income

		(Millions of yen)
	Three months ended	Three months ended
	June 30, 2019	June 30, 2020
Profit for the period	2,560	9,867
Other comprehensive income
Components of other comprehensive income that will
not be reclassified to profit or loss, net of tax
Gains (losses) from investments in equity	9,329	8,431
instruments, net of tax
Total other comprehensive income that will not be	9,329	8,431

reclassified to profit or loss, net of tax Components of other comprehensive income that may be reclassified to profit or loss, net of tax

Foreign currency translation adjustments, net of tax

Other

Total other comprehensive income that may be reclassified to profit or loss, net of tax

Other comprehensive income, net of tax

Total comprehensive income for the period

179	18
(2)	1
177	19
9,507	8,450
12,067	18,317

Attributable to:
Owners of the parent	11,995	18,281
Non-controlling interests	72	36
Total comprehensive income for the period	12,067	18,317

- 8 -

(4) Condensed Consolidated Statement of Changes in Equity

(Millions of yen)

		Equity attributable to owners of the parent
							Non-
	Common	Capital	Retained	Treasury	Other
	components	Total	controlling	Total equity
	stock	surplus	earnings	stock
	of equity		interests
As of April 1, 2019	10,397	10,971	217,973	(11,498)	23,894	251,737	5,129	256,865
Cumulative effect of accounting	-	-	(43)	-	-	(43)	-	(43)
change
Restated balance	10,397	10,971	217,930	(11,498)	23,894	251,694	5,129	256,822
Profit for the period	-	-	2,447	-	-	2,447	113	2,560
Other comprehensive income	-	-	-	-	9,548	9,548	(41)	9,507
Total comprehensive income for the
-	-	2,447	-	9,548	11,995	72	12,067
period
Dividends recognized as distributions	-	-	(5,814)	-	-	(5,814)	(520)	(6,334)
to owners
Increase (decrease) through treasury	-	(223)	-	186	-	(37)	-	(37)
stock transactions
Increase (decrease) through share-	-	14	-	-	32	46	-	46
based payment transactions
Transfer to capital surplus from	-	42	(42)	-	-	-	-	-
retained earnings
Acquisition, disposal and other changes	-	2,452	-	-	-	2,452	2,546	4,998
of non-controlling interests
Increase (decrease) through transfers	-	36	41	-	(40)	38	316	354
and other changes
As of June 30, 2019	10,397	13,293	214,562	(11,312)	33,434	260,373	7,543	267,916
							(Millions of yen)
		Equity attributable to owners of the parent
							Non-
	Common	Capital	Retained	Treasury	Other
	components	Total	controlling	Total equity
	stock	surplus	earnings	stock
	of equity		interests
As of April 1, 2020	10,397	15,237	163,564	(45,139)	36,428	180,486	6,833	187,319
Profit for the period	-	-	9,902	-	-	9,902	(12)	9,867
Other comprehensive income	-	-	-	-	8,379	8,379	71	8,450
Total comprehensive income for the
-	-	9,902	-	8,379	18,281	36	18,317
period
Dividends recognized as	-	-	(2,510)	-	-	(2,510)	(566)	(3,076)
distributions to owners
Increase (decrease) through treasury	-	(18)	-	(2,433)	-	(2,450)	-	(2,450)
stock transactions
Cancellation of treasury stock	-	(35,616)	-	35,616	-	-	-	-
Increase (decrease) through share-	-	10	-	-	6	16	-	16
based payment transactions
Transfer to capital surplus from	-	35,622	(35,622)	-	-	-	-	-
retained earnings
Acquisition, disposal and other	-	167	-	-	-	167	233	400
changes of non-controlling interests
Change resulting from loss of	-	-	-	-	(52)	(52)	(2,925)	(2,977)
control of subsidiaries
Increase (decrease) through transfers	-	416	193	-	(193)	416	186	603
and other changes
As of June 30, 2020	10,397	15,817	135,527	(11,956)	44,567	194,353	3,797	198,151

- 9 -

(5) Condensed Consolidated Statement of Cash Flows

			(Millions of yen)
		Three months ended	Three months ended
		June 30, 2019	June 30, 2020
Operating activities
Profit before tax	3,863	14,462
Depreciation and amortization	3,309	1,333
Profit for transfer from business divestitures	-	(2,045)
Gain on sales of shares of subsidiaries and associates	-	(7,889)
Impairment loss	1,183	-
Interest and dividend income	(1,177)	(1,464)
Interest expenses	8	16
Share of loss of associates accounted for using the equity method	(1,016)	708
Decrease (increase) in trade and other current receivables	4,631	906
Increase (decrease) in trade and other current payables	(2,292)	(3,370)
Increase (decrease) in deposits received	762	459
Increase (decrease) in advances received	(3,117)	4,367
Other, net	679	(2,252)
Subtotal	6,832	5,231
Dividends received	1,142	1,444
Interest paid	(1)	(12)
Interest received	42	20
Income tax paid	(604)	(344)
Income tax refund	-	10
Cash flows from (used in) operating activities	7,411	6,349
Investing activities
Proceeds from sales of subsidiaries or other businesses, net of	86	45
cash disposed of
Sales of subsidiaries or other businesses, net of	-	(191)
cash acquired
Purchase of shares of associates	(1,750)	(200)
Proceeds from sales and redemption of investment securities	1,805	1,690
Purchases of investment securities	-	(198)
Acquisition of property and equipment	(241)	(3,275)
Acquisition of intangible assets	(3,772)	(1,594)
Other, net	(90)	29
Cash flows from (used in) investing activities	(3,962)	(3,695)
Financing activities
Proceeds from borrowings	-	20,000
Repayments of borrowings	-	(3,000)
Repayments of lease liabilities	(531)	(708)
Cash dividends paid	(5,646)	(2,425)
Proceeds from share issuance to non-controlling interests	4,998	400
Cash dividends paid to non-controlling shareholders	(520)	(566)
Proceeds from disposition of treasury stock	41	3
Purchase of treasury stock	-	(2,445)
Net cash flows from (used in) financing activities	(1,657)	11,259
Net increase in cash and cash equivalents	1,792	13,913
Cash and cash equivalents at beginning of period	101,386	73,536
Effect of exchange rate changes on cash and cash equivalents	(52)	(42)
Decrease in cash and cash equivalents resulting from exclusion of
-	(4,374)
subsidiaries from consolidation
Cash and cash equivalents at end of period	103,126	83,033
- 10 -

1. Notes on Going Concern Assumption Not applicable.
2. Notes to Condensed Consolidated Financial Statements

1. Additional information (Important accounting estimates)
   There are no major changes to the assumptions related to the impact of the spread of COVID-19 on the professional baseball business stated in (Additional information) in the Securities Report from the fiscal year ended March 31, 2020.
2. Segment information

1. Outline of reportable segments

The Group principally provides Internet services for mobile and PC users and organizes business divisions by type of service. Each of these business divisions formulates comprehensive business strategies for the services it provides, and undertakes related business activities.

Therefore, the Group is composed of operating segments classified by the types of services provided. The four reportable segments of the Group are classified as the "Game Business," "Sports Business," "Live Streaming Business" and "Healthcare Business."

The types of services provided by each segment classification are shown in the table below:

Segment classification	Type of service
Game Business	Game for mobile devices-related services (provided in Japan
	and internationally)
	Principal services: Mobage, etc.
Sports Business	Sports-related services (provided in Japan)
	Principal services: Yokohama DeNA BayStars Baseball Club,
	operation of the Yokohama Stadium, Kawasaki Brave Thunders,
	Yokohama DeNA Running Club, etc.
Live Streaming Business	Live streaming-related services (provided in Japan)
	Principal services: Pococha, SHOWROOM, etc.
Healthcare Business	Healthcare-related services (provided in Japan)
	Principal services: MYCODE, kencom, Aruite Otoku, etc.
New Businesses and	New businesses and other services (provided in Japan and
Others	internationally)
	Principal business domains: IP-generating platform business, E-
	commerce business, other new businesses, etc.

The "Live Streaming Business," which had been included in "New Businesses and Others" until the fiscal year ended March 31, 2020, has been reclassified under a reportable segment due to the expansion in its business scale and increased importance to management. Moreover, until the fiscal year ended March 31, 2020, reportable segments consisted of the four segments of the "Game Business," "Sports Business," "Automotive Business" and "Healthcare Business." However, from the three months ended June 30, 2020, the reportable segments have been reclassified into the four segments of the "Game Business," "Sports Business," "Live Streaming Business" and "Healthcare Business" following a review of segment management classification in response to changes in the Group structure.

Segment information for the three months ended June 30, 2019 has been restated in accordance with the new segmentation.

2) Revenue, profit or loss, and other items by reportable segment

Accounting policies for reportable segments are identical to those of the Group in the consolidated financial statements for the fiscal year ended March 31, 2020.

- 11 -

Intersegment revenue is calculated based on external market prices.

Revenue, profit or loss, and other items of the Group's reportable segments are as follows:

For the three months ended June 30, 2019(From April 1, 2019 to June 30, 2019)

						(Millions of yen)
			Live		New
	Game	Sports	Healthcare	Businesses	Adjustments
	Streaming	Total
	Business	Business	Business	and	*3
	Business
				Others *2
Revenue
Revenue from external	19,692	7,923	1,751	415	1,602	―	31,383
customers
Intersegment revenue	2	28	―	―	8	(39)	―
Total	19,695	7,951	1,751	415	1,610	(39)	31,383
Segment profit (loss)*1	3,404	2,657	(312)	(454)	(1,519)	(336)	3,440

Other income (expenses), net

Operating profit

Finance income (costs), net

Share of profit (loss) of associates accounted for using the equity method

(1,121)

2,319

528

1,016

Profit before tax	3,863

(Notes) 1 Segment profit (loss) is calculated by deducting cost of sales and selling, general and administrative expenses from revenue.

2 "New Businesses and Others" refer to operating segments that do not fall into any of the reportable

segments, including IP-generating platform business, E-commerce business, Automotive business, and other new businesses.

3 Adjustments in segment profit (loss) represent corporate expenses, which primarily include general and administrative expenses not attributable to any of the reportable segments.

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For the three months ended June 30, 2020(From April 1, 2020 to June 30, 2020)

						(Millions of yen)
			Live		New
	Game	Sports	Healthcare	Businesses	Adjustments
	Streaming	Total
	Business	Business	Business	and	*3
	Business
				Others *2
Revenue
Revenue from external	21,227	1,185	5,742	446	1,441	―	30,041
customers
Intersegment revenue	4	25	―	―	138	(168)	―
Total	21,231	1,211	5,742	446	1,579	(168)	30,041
Segment profit (loss)*1	4,608	(2,082)	766	(373)	(152)	(192)	2,576

Other income (expenses), net

Operating profit

Finance income (costs), net

Share of profit (loss) of associates accounted for using the equity method

9,994

12,570

2,599

(708)

Profit before tax	14,462

(Notes) 1 Segment profit (loss) is calculated by deducting cost of sales and selling, general and administrative expenses from revenue.

2 "New Businesses and Others" refer to operating segments that do not fall into any of the reportable segments, including IP-generating platform business, E-commerce business, and other new

businesses.

3 Adjustments in segment profit (loss) represent corporate expenses, which primarily include general and administrative expenses not attributable to any of the reportable segments.

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3. Earnings per share

The basis for calculating earnings per share attributable to owners of the parent for the three months ended June 30, 2019 and 2020 are as follows:

	Three months ended	Three months ended
	June 30, 2019	June 30, 2020
	(From April 1, 2019 to	(From April 1, 2020 to
	June 30, 2019)	June 30, 2020)
Profit for the period attributable to owners of the	2,447	9,902
parent (Millions of yen)
Weighted average number of common shares	145,377,635	123,993,459
outstanding during the period-basic (Shares)
Effect of dilutive potential common shares:
Stock options, etc. (Shares)	161,149	161,113
Weighted average number of common shares	145,538,784	124,154,572
outstanding during the period-diluted (Shares)
Earnings per share attributable to owners of the
parent (Yen)
Basic earnings per share	16.83	79.86
Diluted earnings per share	16.81	79.75

4. Impairment of assets

The Group recognized impairment losses, which are recorded under "other expenses" in the condensed consolidated income statement.

The breakdown of the impairment losses is as follows:

		(Millions of yen)
	Three months ended	Three months ended
	June 30, 2019	June 30, 2020
	(From April 1, 2019 to	(From April 1, 2020 to
	June 30, 2019)	June 30, 2020)
Intangible assets
Software	(1,183)	―
Total	(1,183)	―

The Group organizes its assets into the smallest group of assets that generates identifiable independent cash flows. Future cash flow is estimated on the basis of past results and management evaluation of future forecasts, using external and internal information.

For the three months ended June 30, 2019(From April 1, 2019 to June 30, 2019)

In certain services in the Game Business, an impairment loss of ¥1,183 million was recorded for software associated with said services as initially projected revenues can no longer be expected. The recoverable amount was calculated based on its value in use, and as future cash flow was expected to be negative, this value was viewed as zero.

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5. Significant subsequent events

(Capital increase through a third-party allotment by an associate accounted for using the equity method) Mobility Technologies Co., Ltd. (Headquarters: Chiyoda-ku, Tokyo; Representative Director & President:

Hiroshi Nakajima), an associate of the Company accounted for using the equity method entered into a capital and business alliance with NTT DOCOMO, INC. (Headquarters: Chiyoda-ku, Tokyo; President and Chief Executive Officer, Representative Member of the Board of Directors: Kazuhiro Yoshizawa) and Tokyo Century Corporation (Headquarters: Chiyoda-ku, Tokyo; President & CEO: Makoto Nogami), and Dentsu Group (Dentsu Group Inc. (Headquarters: Minato-ku, Tokyo; Representative Director, President & CEO: Toshihiro Yamamoto) and DENTSU INC. (Headquarters: Minato-ku, Tokyo; Representative Director, President & CEO: Hiroshi Igarashi)) on July 13, 2020, and conducted a capital increase through a third-party allotment. As a result, the Company shareholdings of Mobility Technologies changed, and the Company expects to record approximately ¥3,800 million in share of profit of associates accounted for using the equity method in the condensed consolidated income statement for the six months ending September 30, 2020.

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